GTM – Top 6 Reasons Partner Ecosystems Fail to Meet Objectives

aBuilding a successful partner ecosystem is crucial for B2B businesses looking to expand their market reach and grow their revenue. Partnerships with Independent Software Vendors (ISVs), Independent Hardware Vendors (IHVs), channels, cloud service providers, and managed service providers can help companies reach new customers, create innovative solutions, enter new markets and accelerate revenue. 

However, too often ecosystem and partner strategies fail to produce the results intended. To grow a successful partner ecosystem, it’s important to have a strong foundation in place. 

While building a partner ecosystem can be highly beneficial, it can also be challenging. In this section, we’ll discuss the top 6 mistakes companies make when setting up an effective partner ecosystem program.

1. Failing to Define a Clear Strategy

One of the biggest mistakes companies make is failing to define a clear strategy for their partner ecosystem program. Without a clear strategy, it can be difficult to prioritize and focus resources effectively. To avoid this mistake, companies should take the time to define a clear strategy for their partner ecosystem program that aligns with both their business goals, takes an outcomes based approach based on the four reasons why businesses partner (listed below), and an understanding of where prospective partners may view how the partnership with your company creates value for them. Too often startegies come from a one-sided view alone and wonder why they fail. The answer is often insufficient joint value.

Typically partnerships are developed to achieve one of four goals.

  • Product or Portfolio Completion – Typically technology relationships to complete or augment your companies portfolio.
  • Direct Revenue Contribution – OEM or Managed service type of relationships where the partner is directly contributing to revenue growth through the inclusion or embedding of your product into their offering or service.
  • Expansion of Market or Regional Reach – Channel partnerships and resale relationships extend a companies reach into regions or markets that you want to access. Whether simply providing feet on the street to access new countries, for example, or add industry specific expertise and access to customers.
  • Sales Cycle / Revenue Acceleration – These types of partnership often offer little value to the partner but are key to either product adoption of sales growth. An example may be an infrastructure technology partner who a customer(s) use as part of their operations which require interaction with your product or service.

2. Poor Partner Selection

Partner selection is critical to the success of a partner ecosystem program. However, many companies make the mistake of selecting partners based solely on size or reputation, without taking into account factors such as market fit, ideal customer profile reach, or alignment with their company’s values. To avoid this mistake, companies should develop a clearly documented ideal customer profile with regional and vertical considerations along with a comprehensive partner selection process that includes factors such as market fit, expertise, and shared values.

3. Enablement and Support

Partners need support to be successful, but many companies fail to provide the necessary enablement and support. This can include product information, marketing materials, training, and ongoing support. To avoid this mistake, companies should develop a comprehensive enablement and support program that provides partners with the resources and support they need to be successful.

A survey by Channel Marketer Report, reported 71% of partners say that access to product and sales training is one of the most important factors in a successful partnership.

4. Ineffective Communication

Effective communication is critical to building strong partnerships. However, many companies fail to communicate effectively with their partners, leading to misunderstandings and missed opportunities. To avoid this mistake, companies should develop a comprehensive communication plan that includes regular check-ins, clear expectations, and ongoing feedback. This can have a direct impact on effective joint pipeline development.

80% of partners say that collaboration and effective communication with vendors on joint pipeline development is important to their success, according to Channel Marketer Report.

5. Lack of Result-based Incentives

Incentives are a powerful tool for motivating partners, but many companies fail to provide the necessary incentives to drive success. This can include MDFs, rewards programs, and other incentives. To avoid this mistake, companies should develop a comprehensive incentive program that rewards partners for success and provides ongoing motivation. 

Companies that offer effective MDF incentives to their partners report 28% higher revenue growth than those that do not, according to a report from Forrester Research, “The ROI of Channel Partner Enablement,” .

The incentives should also take into account product offering maturity. Early products may require extra effort and investment by partners to build the business. Companies should look at this as a shared cost with focused efforts and clear joint success metrics. 

6. Failing to Adapt

The market and business environment are constantly changing, and companies that fail to adapt risk being left behind. This includes adapting their partner ecosystem program to meet changing market conditions and partner needs. To avoid this mistake, companies should regularly evaluate their partner ecosystem program and make necessary adjustments to ensure its ongoing success.

In conclusion, building a successful partner ecosystem program requires careful planning and execution. By avoiding these common mistakes, companies can build strong partnerships that drive growth and revenue for their business.

Scott Clinton
Author: Scott Clinton

Scott has 20 years of industry executive leadership experience leading Developer, Software-defined infrastructure, Big Data, Hadoop, Security and Hybrid-cloud product portfolios for some of the industry’s leading global technology providers including EMC, Hortonworks/Cloudera, MobileIron, Red Hat, Qualys, VMWare, and Sun. Educated in Silicon Valley, Scott holds Bachelors of Computer Systems Design and International Business degrees.

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